Sino-Forest Corporation Announces Convertible Senior Notes Offering



    /NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED
    STATES OR TO U.S. WIRE SERVICES/

    TORONTO, July 16 /CNW/ - Sino-Forest Corporation (the "Company") (TSX:
TRE and TRE.S) today announced that it is offering convertible senior notes in
the international markets. The anticipated size of the offering will be US$300
million plus 15% over-allotment option. The final size and details of the
offering, including the interest rate payable on the notes, the maturity date
of the notes and the terms at which the notes will be convertible into common
shares of the Company, will be determined after completion of marketing
activities and is subject to prevailing market conditions. The Company intends
to use the net proceeds of the offering as follows:

    
    -  approximately US$230 million as initial capital for the acquisition of
       commercial plantation forests in the Fujian Province of the People's
       Republic of China ("PRC") to develop fast-growing high yielding
       plantations. The Company also intends to vertically integrate these
       plantations with its downstream wood processing facilities in the PRC;

    -  approximately US$15 million to lease land and plant with Jatropha
       trees, a drought-resistant and fast-growing species that grow on
       fertile and non-fertile soil, in Southern PRC. As a founding member of
       China Green Carbon Foundation, the Company plans to collaborate with
       the PRC State Forestry Administration to research and develop Jatropha
       species for large-scale propagation. The Company intends to collect
       and extract raw seeds oil from Jatropha seeds; and

    -  the balance of the net proceeds will be employed for general working
       capital purposes.
    

    The specific terms and conditions of the aforementioned acquisitions are
to be determined upon the execution of the definitive agreements between the
relevant parties. The Company intends to make a further public announcement if
and when its offering plan becomes definitive. No assurance can be given that
the Company will not terminate this preparation process or alter the amount or
terms of the offering due to market conditions or otherwise.

    This press release is not for distribution, directly or indirectly, in or
into the United States (including its territories and possessions, any State
of the United States and the District of Columbia).

    This press release does not constitute or form a part of any offer or
solicitation to purchase or subscribe for securities in the United States or
any other jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such jurisdiction. No securities of Sino-Forest Corporation may be offered
or sold in the United States unless they are registered under the US
Securities Act of 1933, amended, or exempt from registration. Sino-Forest
Corporation does not intend to conduct a public offering in the United States
and the securities referred to herein have not been and will not be registered
into the United States.

    About Sino-Forest Corporation

    Sino-Forest Corporation is a leading commercial forestry plantation
operator in China. The Canadian company started its operations in 1994 and was
of the first few foreign and privately managed operators involved in forest
products in China. Its principal businesses include the ownership and
management of forestry plantation trees and sales of standing timber, logs and
wood chips, and complementary manufacturing of downstream engineered-wood
products. The Corporation's common shares trade on the Toronto Stock Exchange
under the symbol TRE since 1995.

    Please note: This press release contains projections and forward-looking
statements regarding future events. Such forward-looking statements are not
guarantees of future performance of the Company and are subject to risks and
uncertainties that could cause actual results and company plans and objectives
to differ materially from those expressed in the forward-looking statements.
Such risks and uncertainties include, but not limited to, changes in China and
international economies; changes in currency exchange rates; changes in
worldwide demand for the Company's products; changes in worldwide production
and production capacity in the forest products industry; competitive pricing
pressures for the Company's products and changes in wood and timber costs.





For further information:

For further information: DAVE HORSLEY - Senior Vice President & Chief
Financial Officer, Tel: (905) 281-8889, Email: davehorsley@sinoforest.com;
LOUISA WONG - Senior Manager, Investor Communications & Relations, Tel: +852
2514 2109, Email: louisa-wong@sinoforest.com

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Sino-Forest Corporation

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